In 2023, Americans broke the record by filing 5.5 million new business applications. But the sad truth is, not all of these ventures will be successful, nor will they stand the tests of time.
If you’re the owner of a limited liability company (LLC) and it’s not going the way you thought it would, then perhaps it’s time to throw in the towel. This will free you up for bigger and better things.
So do you have an LLC in North Carolina that you don’t want anymore? Then read on. Here’s how to dissolve an LLC in NC.
Have a Unanimous Member Consent or Dissolution Vote
According to North Carolina law, the LLC members must first agree to dissolve the company. This decision typically requires unanimous member consent, unless your company’s operating agreement specifies otherwise.
Give LLC members ample time to meet and discuss the company’s dissolution. Specific minimum days of notice may even be mentioned in your operating agreement. This can facilitate a more efficient formal vote.
Notify Creditors and Claimants
Before you dissolve your NC LLC, it’s important to settle all outstanding debts and obligations. If necessary, notify creditors and claimants of the impending dissolution, which may include your own LLC members.
What’s great about the state of North Carolina is unlike other states, you won’t have to get a tax clearance certificate. As a result, it’ll be much quicker to get through the process.
It may still be a good idea for you to inform the IRS of your LLC’s dissolution though. So consider filing Form 966 with the IRS after you’re done. Regardless, you’ll have to file your final federal, state, and local tax returns for the LLC.
File the NC Articles of Dissolution
In this state, you’d file Form L-07, which is the Articles of Dissolution of Limited Liability Company. On this form, accurately provide all necessary information about the LLC, including its name, date of dissolution, and signatures of authorized members.
The complete form should be sent to NC’s Secretary of State; you can do this online, by mail, or in person. Do note that you’ll have to pay a $30 filing fee, which you can pay through several methods (online, money orders, checks (certified, business, or personal), or cash).
The form should be processed within five business days max if you file online. This increases to ten business days if you use snail mail.
If you’d like to expedite the process, you can pay an additional $200 fee. This will allow your form to be processed on the same day you submit it. A smaller expedite fee of $100 will allow your form to be processed within 24 hours, excluding weekends and holidays.
Take Care of Business Affairs
If you have any, cancel business licenses, permits, or registrations for your North Carolina LLC. These may be with local, state, or federal agencies. LLCs that have an employer identification number (EIN) won’t need to do anything to cancel it.
Your LLC’s closing may come as a surprise to many parties, so do your best to notify as many other entities as possible. For example, you may want to reach out to landlords, suppliers, and service providers to inform them of the LLC’s dissolution. Do the same with any customers who are reliant on your services or products; be prepared to provide them with refunds.
Are there any bank accounts held by the company? Then close them and transfer the remaining funds as appropriate.
Distribute Assets
On that note, if there are any remaining assets after settling debts and obligations, distribute them among the LLC members according to their ownership interests. You can find this information in the company’s operating agreement.
At this point, you can hold a final meeting of LLC members. You can document the dissolution process and any final resolutions.
What Happens if You Don’t Follow the Proper Steps?
Every year, you must file an annual report for your LLC. If you don’t properly dissolve your business, don’t expect that a non-filing for your annual report will suffice.
Instead, you’ll get a Notice of Grounds for Administrative Dissolution from NC’s Secretary of State. You’ll then have 60 days to rectify the situation and properly dissolve your LLC. If you fail to meet this deadline, then it’ll be administratively dissolved.
Should you want to “revive” your business, you can file an Application for Reinstatement Following Administrative Dissolution, which costs $100. In addition, you’ll have to file all of your late annual reports, each of which will cost $200.
Know How to Dissolve an LLC in NC
If you’re no longer interested in running your current business, then you now know how to dissolve an LLC in NC. It’s not too difficult, especially since the state doesn’t require you to get a tax clearance certificate.
So if you’re considering a dissolution, the first step is to hold a meeting with the LLC members. In most cases, without a unanimous vote, you won’t be able to start the process, meaning this is the vital hurdle you’ll have to initially clear.
Are you ready to dissolve your LLC and start a new one? Then sign up with Business Anywhere today. We can get you registered within minutes.
